Stock Watch - Stock pick — Shoprite and Bidvest

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Chantal Marx from FNB wealth And Investments chose Shoprite as her stock pick and Ricus Reeders from PSG Wealth Sandton chose BidvestMarx said: "I quite like the South African food retail space at the moment. I specifically like Spar and Shoprite. Shoprite is my pick for tonight I think that this is a stock that does quite well in terms of gaining market share when times are tough. I think that they've been through the worst of a perfect storm that hit them over the last two years in terms of their African operation, setting up new DCs, implementing a new IT system and massive security issues. They seem to be moving out of this quite well now so the stock still looks attractively priced at current levels. If you expect conditions to remain quiet bleak, expect shoppers to trade down."Reeders said: "Bidvest came out with numbers and this price goes below R170 because there's a market shock. It's going to go low so there's your stop-loss in place but considering the results it's a story I like. Always growing turnover, increasing margins and obviously that took a bit of a hit from Comair but they have a huge balance sheet and great cash flow. It's the type of company that I want specifically if this is a sort of a bottom issue and things don't get worse and it's been trading in a band between round about of R170 and R220 so that gives you about a 20% upside if things work out, if not you know with the stop-loss is R170 and so maybe buy little bit and let's see how it goes for the next few months"
3 Mar 2020 1AM English South Africa Business · Investing

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